H1 2021 Review of Shareholder Activism
LAZARD'S CAPITAL MARKETS ADVISORY GROUP H1 2021 Review of Shareholder Activism
Lazard has prepared the information herein based upon publicly available information and for general informational purposes only. The information is not intended to be, and should not be construed as, financial, legal or other advice, and Lazard shall have no duties or obligations to you in respect of the information. H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Observations on the Global Activism Environment in H1 2021
• 94 new campaigns were initiated globally in H1 2021, in line with H1 2020 levels − Year-over-year stability buoyed by a strong Q1, with Q2’s new campaigns launched (39) and capital deployed ($9.1bn) below multi-year averages • H1 was distinguished by several high-profile activist successes at global mega-cap companies, including ExxonMobil (Engine No. 1), Danone (Bluebell and Artisan Partners) and Toshiba (Effissimo, Farallon, et al.) • U.S. share of H1 global activity (59% of all campaigns) remains elevated relative to 2020 levels (44% of all campaigns) and in line with historical levels U.S. Activity − The 55 U.S. campaigns initiated in H1 2021 represent a 31% increase over the prior-year period 1 Leads Global Market in H1 • After only initiating one new campaign in Q1 2021, Elliott launched five campaigns in Q2 2021 and returned to being the period’s most prolific activist 2021 • H1 2021 activity in Europe slowed following a record-setting end to 2020; the region’s 21 new campaigns included Elliott’s agitation at GlaxoSmithKline and Bluebell’s campaigns at Danone and Vivendi • 10 campaigns were launched at Japanese targets in H1, and the share of non-U.S. activity represented by Japanese targets (26%) reached the highest level in recent years − The activist success at Toshiba is viewed as a watershed moment in Japanese activism that may catalyze further scrutiny of Japan’s corporate governance system • Engine No. 1’s proxy fight at ExxonMobil – which saw the Company replace two incumbents in the lead-up to the AGM and an additional three seats won in the final vote – made Exxon the largest issuer ever to lose a proxy fight Successful − Engine No. 1’s campaign – which coupled “traditional” criticisms of performance and strategy with ESG attack vectors – was also noteworthy due to Attack on the wide margin of victory and broad shareholder support across the “Big 3” U.S. passive managers, pensions funds and active managers ExxonMobil 2 Dominates • The ousting of Toshiba’s Chairman and one other Director at its 2021 AGM that followed an investigation into allegations of collusion to influence Proxy Season shareholder votes further showcased investors taking a more active stance to hold leaders accountable for perceived governance failures • A number of highly contentious proxy fights remain unresolved heading into H2 2021, including Starboard’s ongoing agitation at Box for three Board seats and open criticism of KKR’s recent “white squire” investment
M&A-Related • 44% of all activist campaigns in H1 2021 featured an M&A-related thesis, in line with the multi-year average of 40% Activism − Among all global M&A-focused campaigns in H1 2021, 56% centered on scuttling or sweetening an announced transaction; among European M&A- 3 Persists, with focused campaigns, this figure was 100% Opposition to ▪ Prominent examples of scuttle/sweeten campaigns included Canadian National (TCI) and Hilton Grand Vacations (Land & Buildings) Deals on the − By contrast, campaigns pushing for an outright sale of the company occurred relatively less frequently, accounting for only 12% of M&A-related Rise campaigns in H1 2021, below the multi-year average of 34%
• Investor support for E&S-related shareholder proposals reached new highs: 14% of all proposals passed in H1 2021, up from a three-year average of ESG Remains in ~6%, as proposals at companies such as Chevron and DuPont secured broad-based backing 4 the Spotlight • ESG equity inflows moderated in April and May (average monthly inflows of $2.2bn versus $3.7bn in Q1) but remain on pace to surpass 2020’s record • Environmental issues dominated the regulatory conversation as the SEC aims to propose rules on mandatory climate disclosures as early as October
Significant Dry • Record-breaking SPAC activity continued into H1 2021, with 163 SPACs completing deals and $129bn of dry powder still searching for targets 5 Powder for • Short activism targeting de-SPACed companies has emerged as an increased threat in H1 2021, with prominent short sellers, such as Hindenburg SPAC M&A Research, attacking high-profile de-SPACs such as DraftKings, Lordstown Motors and Clover Health
Source: FactSet, press reports and public filings as of 6/30/2021. Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select 1 campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. 1 Global Activism Activity H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Global Campaign Activity and Capital Deployed ($ in billions)
Annual Campaign Activity1 Quarterly Campaign Activity
1 # of Companies Targeted1 # of Campaigns Initiated H1 2021 campaign # of Campaigns Initiated1 Robust Q1 activity lifted H1 2021 levels activity was down 6% 249 relative to H1 2020 212 levels 73 227 209 Mean: 194 186 63 60 57 54 59 55 Mean: 52 52 46 188 187 173 94 43 41 39 26
100 133 103 96 90
2017 2018 2019 2020 H1 2021 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021
Capital Deployment in New Campaigns ($bn) H1 2021 Capital Deployed by Sector
Aggregate Value of New Activist Positions2 Aggregate Value of New Activist Positions2 Over half of H1 capital deployed was concentrated in the Industrials, $67.2 18% Financials and Retail sectors $62.5 18% 15% 7.8 13.5 $3.7 11% 10% 8.7 $3.6 10% 17.3 $42.3 $40.0 7% 7% $2.9 3% 6.1 $2.2 $2.0 $1.9 1% 19.0 9.5 $1.5 $1.5 $0.5 11.6 $0.2 20.9 4.7 $20.0 11.1
13.0 Retail 9.1 Media
26.0 Telecom
Financial
Industrials
Consumer
Institutions Healthcare
16.5 Power, Real Real Estate 11.6 14.7 10.9 Technology 2017–20 Infra. & Energy 2017 2018 2019 2020 H1 2021 Avg.3 22% 9% 5% 6% 12% 22% 3% 13% 5% 6% Q1 Q2 Q3 Q4 Source: FactSet, press reports and public filings as of 6/30/2021. Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select 2 campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. 1 Companies spun off as part of campaign process counted separately. 2 Calculated as of campaign announcement date. Does not include campaigns in which the size of the activist stake is not publicly disclosed. 3 4-year average based on aggregate value of activist positions. 1 Global Activism Activity H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Global Activist Activity in H1 2021 ($ in billions) Following a muted Q1, Elliott initiated five new campaigns in Q2, regaining its rank as the most prolific activist globally; initiations by first- time activists were in-line with historic levels, with Engine No. 1 capturing meaningful attention
Investors Launching Activist Campaigns H1 2021 Activist Activity by Campaigns Launched
While campaigns from first-timers increased from # of “First Timers” Elliott launched five new campaigns in Q2, a Q1 lows, existing activists accounted for a greater significant uptick from just one campaign in Q1 share of recent activity
6 147 4 4 3 3 3 3 131 130 2 2 2 Mean: 124
109
ValueAct
Partners
Elliott Mgmt. Elliott Inv. Mgmt. Inv.
104 Capital Scopia
JANA Partners JANA
Bluebell Capital Bluebell
Starboard Value Starboard
Ancora Advisors Ancora LandBuildings & 91 89 Icahn Associates 75 Management Oasis H1 2021 Capital Deployed ($bn) 86
$2.3 54 $2.1 $2.0 $1.9
$1.4 $1.3 $1.2 43 $1.0 1 1 40 41 $0.8 $0.8 23 21
2017 2018 2019 2020 H1 2021
% “First Time” TCI 31% 29% 32% 28%
Activists 21%
ValueAct
Capital
Elliott Mgmt. Elliott
SachemHead
Cevian Cevian Capital
Legion Partners Legion
Artisan Partners Artisan
Ancora Advisors Ancora
Icahn Icahn Associates Harris Associates Harris Source: FactSet, press reports and public filings as of 6/30/2021. Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select 3 campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. 1 Includes the value of the entire ~9.5% stake taken in Kohl’s by the consortium of Ancora Advisors, Legion Partners, Macellum Advisors and 4010 Capital announced on 2/21/2021. 1 Global Activism Activity H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
U.S. Rebound Driving H1 Global Activity ($ in billions) H1 2021 U.S. activity remained elevated relative to 2020 levels, representing 59% of global campaigns; capital deployed in the U.S. increased Y-o-Y, representing 44% of capital deployed, but was below multi-year averages (54%) and its Q1 2021 level (56%)
Regional Breakdown of Campaigns Initiated by Year Regional Breakdown of Capital Deployed by Year
Significant increase in Canada reflects TCI’s $2.3bn stake at Canadian National
<1% 1% 1% 2% United States <1% <1% <1% <1% Europe 2% 3% <1% 4% 4% 4% 5% 2% APAC 6% 5% 10% 3% 12% Canada 16% 13% 15% Rest of World 8% 14% 12% 18% 21% 11% 25% 25% 23% 36% 22% 23% 22%
32% 32% 29%
61% 59% 59% 60% 60% 57% 54% 44% 41% 44%
2017 2018 2019 2020 H1 2021 2017 2018 2019 2020 H1 2021
Source: FactSet, press reports and public filings as of 6/30/2021. Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select 4 campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. APAC includes all of Asia, Australia and New Zealand. 1 Global Activism Activity H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
U.S.: Campaign Activity and Capital Deployed ($ in billions)
U.S. Annual Campaign Activity1 U.S. Campaign Activity by Month (LTM)
1 # of Companies Targeted1 # of Campaigns Initiated Q2 2021 activity receded 15 from Q1 surge 141 129 124 13 13 12 10 124 83 $4.0 Mean: 105 111 107 $3.5 7 55 5 6 78 5 5 4 $1.0 $1.0 $1.2 1 $0.5 $0.7 $1.1 77 52 $0.4 65 63 $0.1 41 $1.2 $1.4 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 2017 2018 2019 2020 H1 2021 Campaigns Initiated Capital Deployed
U.S. Market Cap. Breakdown of New Campaigns, H1 20212 H1 2021 U.S. Capital Deployed by Sector2
Small-cap companies (<$2bn) In contrast with global targets, U.S. activism <$2bn were again the most targeted was concentrated in the Technology and $2bn – $5bn by activists after large-caps Power, Energy & Infrastructure sectors 22% $5bn – $10bn ($25bn+) came under pressure 9% in the back half of 2020 $10bn – $25bn $1.9 16% 14% 11% 11% >$25bn 9% 9% $1.5 7% 3% 2% $1.2 $1.0 5% $1.0 $0.8 $0.3 $0.2
9% 44% $0.6 $0.4
Retail
Media
Telecom
Financial
Industrials
Consumer
Healthcare Power,
29% Institutions
Technology Real Estate Energy & Infra. & Energy
2017–20 23% 18% 3% 17% 4% 7% 11% 3% 5% 9% Avg.3
Source: FactSet, press reports and public filings as of 6/30/2021. Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select 5 campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. 1 Companies spun off as part of campaign process counted separately. 2 Calculated as of campaign announcement date. 3 4-year average based on aggregate value of activist positions. 1 Global Activism Activity H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
U.S.: Notable H1 2021 Public Campaign Launches and Developments ($ in billions) Launch Company / Launch Company / Date Market Cap Activist Highlights Date Market Cap Activist Highlights
• In March, the activist group filed a definitive proxy statement for its slate of nominees and sent a letter to shareholders criticizing the “chronic • In June, The Wall Street Journal reported that underperformance of Kohl’s stock price” and Elliott had taken a ~10% stake in Dropbox and 6/21 2/21 “deeply flawed executive compensation had been holding private conversations with $8.9 $8.3 practices,” among other issues management • Kohl's entered into a settlement agreement with the activists whereby the Company would add two new independent Directors to its Board
• In May, ISS recommended shareholders support three of Engine No. 1’s Director nominees at Exxon; Glass Lewis recommended shareholders • In May, Bloomberg reported that Icahn had taken vote for two of Engine No. 1’s nominees a stake in Allstate and that the activist supported • Later in May, Exxon publicly committed to adding 5/21 12/20 the Company’s plans to cut costs and reinvigorate two additional Directors, one with climate $40.8 $172.9 growth by selling products directly to consumers expertise and the other with energy expertise • At the 2021 AGM, Engine No. 1’s nominees Gregory Goff, Kaisa Hietala and Alexander Karsner were elected to the Company’s Board • In February, Icahn nominated three Directors for • In May, The Wall Street Journal reported that election to Delek’s Board at its 2021 AGM; Icahn Elliott had taken a stake in Duke Energy and was pushing for Board representation and asset stated its nominees would push the Company to disposals cease operations at two refineries • In March, Icahn sent a letter criticizing the 5/21 3/20 • A week later, Elliott published a letter pushing the Company’s executive compensation practices Company to appoint new independent Directors $79.8 $0.9 and stating that Delek CEO Ezra Yemin was paid and form a strategic review committee to explore “extremely well compared to the results” separating the Company into three regionally • Delek shareholders rejected Icahn’s nominees at focused utilities the May AGM • In April, KKR invested $500mm in Box in • In May, Land & Buildings published a exchange for a Board seat, which Starboard presentation and corresponding letter criticizing criticized as a “white squire” defensive tactic Hilton Grand Vacations’ acquisition of Diamond • In May, Starboard nominated four Directors for Resorts and indicating that it would vote against election, including managing member Peter Feld 5/21 9/19 the deal; the presentation cited Diamond’s inferior • In July, Box revealed Starboard had sought and $2.2 $3.9 growth profile and claimed that “[Hilton Grand was invited to participate in the KKR investment, Vacations was] overpaying for Diamond Resorts demanded any settlement require Feld gaining a at 10x 2019 EBITDA” Board seat and threatened a proxy fight unless Box fired its CEO or sold itself Source: FactSet, press reports and public filings as of 6/30/2021. 6 1 Global Activism Activity H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Europe: Campaign Activity ($ in billions)
European Annual Campaigns Activity1 H1 2021 European Campaigns by Target Market Cap
# of Companies Targeted1 # Campaigns Initiated Market Cap of Target at Elevated activity at Campaign Announcement large-cap companies
58 37% 60 57 60 33% 29% 52 57 24% 54 21% 50 48 50 49 15% 15% 14% 12%
44 40 40 0%
<$2bn $2bn-$5bn $5bn-$10bn $10bn-$25bn $25bn+ 30 30 2017–20 Avg. H1 2021
21 H1 2021 Campaigns by Sector (in %) 20 20 H1 2021 European activism focused on FIG and Healthcare, 30 28 shifting away from Industrials 27 24% 24% 10 19 20 10 19% 14% 10% 0 0 5% 5% 2017 2018 2019 2020 H1 2021
0% 0% 0%
Retail Media
• While European activist campaigns reached record levels in H2 2020, Telecom
Financial
Industrials
Consumer
Institutions
Healthcare
Power, Technology
H1 2021 saw a decreased level of campaign activity Real Estate Energy & Infra. & Energy • However, activists may be repositioning in a “post-COVID” market, and launched more campaigns in Q2 than in Q1 2021 2017–20 14% 6% 16% 25% 4% 6% 12% 7% 7% 4% Avg.2 Source: FactSet, press reports and public filings as of 6/30/2021. Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select 7 campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. 1 Companies spun off as part of campaign process counted separately. 2 4-year average based on aggregate value of activist positions. 1 Global Activism Activity H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Europe: Return of Large-Cap Activists in a Diversified Activism Landscape
Campaigns by Activist Category Resurgence of Leading Large-Cap Activists1
Institutional & Leading Large- Average 1 33% 23% 16% 24% Others Cap Activists per year 29% 10% Q1 Q2 Historically, large-cap 10% 36% Occasional and other activist funds 1 18% accounted for ~3 2018 - 2019 quarters of European 1 activist campaigns
Other 1 Activists 43% 1 1 2 Institutional Leading Large- & Others Cap Activists 1 1 1 1 Institutional 24% 16% 6 shareholders and occasional activists 1 2020 became more vocal in 4 4 the challenging environment created by 3 1 3 3 3 Other the pandemic 2 Occasional Activists 26% 1 1 1 1 34% 0 0 2018 2019 2020 H1 2021
Institutional Leading Large- Elliott Cevian Third Point ValueAct Trian & Others Cap Activists 1 In H1 2021, the 24% 24% resurgence of full-time activists, along with H1 2021 continued high • The prevalence of activist campaigns by large-cap activists1 shrunk as institutional activity, has a proportion of total campaigns over the last three years resulted in a more Occasional balanced landscape • This year, there has been a resurgence of large-cap activists, which 9% Other accounted for ~36% of campaigns in Q2 2021 vs. 10% in Q1 2021 and Activists ~16% in 2020 43%
Source: FactSet, press reports and public filings as of 6/30/2021. Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select 8 campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. 1 Leading Large-cap activists include Elliott Management, Third Point Management, ValueAct Capital, Trian Partners and Cevian Capital. 1 Global Activism Activity H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Europe: Notable H1 2021 Public Campaign Launches and Developments ($ in billions)
Launch Company / Launch Company / Date Market Cap1 Activist Highlights Date Market Cap1 Activist Highlights • In February, Petrus stated that the Company should pursue the Crédit Agricole transaction only if the offer was raised—a few months • In June, Cevian Capital disclosed a ~5% stake after its first criticism in Aviva and criticized the Company’s cost • In March, Alta Global urged Crédit Agricole to structure and strategic decisions, while stating increase its offer that Aviva could increase its value per share 6/21 $23.5 and dividend 3/21 $1.0 • In April, Crédit Agricole increased its offer for Alta Global the Company and reached an agreement with • The public statement followed the newly activist investors to tender their shares for appointed CEO’s decision to exit operations in €12.50 per share several non-core countries • In May, Crédit Agricole acquired 95% of Creval shares via tender offer and will initiate a squeeze-out procedure • In May, Bluebell demanded that Vivendi pay an extraordinary cash dividend following the spin- • In January, Bluebell demanded the separation off of Universal Music Group and move a of the Chairman and CEO roles and for the planned listing from Euronext to NYSE or Company to seek a new CEO given structural consider a dual listing underperformance • In June, Bluebell sent a letter to the French • In February, Artisan called on Danone to 5/21 $42.8 regulator (AMF) raising concerns that the spin- 1/21 $45.4 improve performance, separate the Chairman off was considered without informing investors and CEO roles and replace its CEO or seeking their approval • In March, the Chairman and CEO resigned • A few days later, Artisan Partners said it would from both roles vote against Vivendi’s planned spin-off • In May, Antoine de Saint-Affrique was • Later in June, the separation resolution passed appointed CEO of the company with ~99% approval from shareholders • In April, the Financial Times reported that Elliott had built a multi-billion-pound stake in GSK, and stated that the stake building caught GSK off-guard as there had been no prior • In April, Sarissa Capital Management gained awareness of the position building a Board seat following discussions concerning • In July, Elliott published a letter criticizing Alkermes’ strategy and Board refreshment 4/21 12/20 $3.3 $93.6 persistent operational and share price efforts underperformance and calling for Board • In May, Alkermes added Emily Peterson Alva refreshment as well as a credible process to to its Board, which Elliott publicly supported determine leadership at the separated Biopharma and Consumer Health businesses, among other demands; GSK issued a response the following day
Source: FactSet, press reports and public filings as of 6/30/2021. 9 1 Represents market cap as of earliest activist initiation. 1 Global Activism Activity H1 2021 REVIEW OF SHAREHOLDER ACTIVISM Japan: Shareholder Activism Remains Elevated ($ in billions) With 10 new campaigns in H1 2021, Japan remains one of the most targeted countries outside of the U.S. (26% of new non-U.S. campaigns); activism has been driven by both “blue-chip” global activists and local players • Activists’ success at Toshiba is seen as a transformational event in Japanese activism history that may lead to further reform of Japan’s corporate governance system Campaigns against Japanese Companies Notable Campaign Initiations in Japan Launch Company / Market Cap / 25 Date Activist(s) Highlights • At the March 2021 EGM, Effissimo’s proposal for an independent investigation of the 19 Company’s prior-year AGM was passed; the 16 investigation found that Toshiba and the Japanese Ministry of Economy, Trade and Industry colluded to undermine shareholders’ 11 rights at the AGM by influencing voting 10 inappropriately • In April, Toshiba announced it had received a non-binding offer to be taken private by CVC $14.61 Capital Partners for ~$20bn; Board Chair 4 4 Osamu Nagayama commented that the Company did not view the offer as concrete 1 6/20 and feasible given that it was conditional on a litany of matters; however, Toshiba’s CEO 2015 2016 2017 2018 2019 2020 H1 2021 Nobuaki Kurumatani resigned amid the turmoil • In June, Toshiba announced that it would % of Japanese Campaigns of Non-U.S. Campaigns remove two incumbent Directors and two executives following the investigation into the 2020 AGM Activity in Japan relative to non-U.S. campaigns • At the June 2021 AGM, Board Chair Osamu reached new highs Nagayama and Audit Committee Member 26% Nobuyuki Kobayashi were voted off Toshiba’s 24% Board; following the vote, Director George 22% Olcott resigned from the Board in protest of Nagayama’s ousting • In May 2021, ValueAct initiated an ~4.4% 15% position in Seven & i Holdings and pushed for 13% a break-up of the Company, stating in a letter to shareholders that Seven & i’s sum-of-the- parts valuation was far greater than its current 6% 6% 5/21 market capitalization $37.2 • In June 2021, it was reported that Seven & i intended to sell down its stake in home décor chain Francfranc in order to heighten its focus 2015 2016 2017 2018 2019 2020 H1 2021 on its core business
Source: FactSet, press reports and public filings as of 6/30/2021. 10 Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select campaigns with market capitalizations less than $500 million at time of announcement included during COVID-19 pandemic induced market downturn. 1 Represents date and market cap of earliest campaign initiation. 2 Board Seats Won & Proxy Contests H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Global Board Seats Won The 71 Board seats won by activists in H1 2021 were below prior-year levels; Ancora and Starboard were the most successful activists in securing Board seats, winning eight and six seats, respectively
Board Seats Won1 Non-Activist Employees vs. Activist Employees Appointed as Directors
Board Seats Won1 # of Companies Targeted for Board Seats Board Seats Won1 Non-Activist Fund Employees Appointed Activist Fund Employees Appointed 157 79 132 66 51 Board seats (72% of the 122 61 total) were won at U.S. 55 103 157 companies during H1 2021 121 95 71 132 94 42 122 30 75 103 41 46 51 32 36 37 28 28 20 115 71 81 86 71 2017 2018 2019 2020 H1 2021 Activist Employees 27% 23% 23% 28% 28% 2017 2018 2019 2020 H1 2021 as % of Total
Settlements vs. Proxy Contests H1 2021 Board Seats Won by Activists Board Seats Won1 Board Seats Won through Settlements 8 Ancora won the most seats in H1 Board Seats Won through Proxy Fights 2021, acquiring five seats at Forward 157 Air and three seats at Kohl’s2 6 132 5 122 4 4 103 3 3 3 3 3 122 71 102 111
89 2 64 2 35
14 20 21 7 Vivendi 2017 2018 2019 2020 H1 2021
Won Through Mgmt. Elliott
Oasis Mgmt. Oasis Engine1 No.
Proxy Contest Capital Scopia
LegionPartners Starboard Value Starboard
14% 22% 16% 16% 10% Advisors Ancora LandBuildings & as % of Total Icahn Associates Source: FactSet, press reports and public filings as of 6/30/2021. Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select 11 campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. 1 Represents Board seats won by activists in respective year, regardless of the year in which the campaign was initiated. 2 Board seats won at Kohl’s as part of activist group of Ancora Advisors, Legion Partners, Macellum Advisors and 4010 Capital. 2 Board Seats Won & Proxy Contests H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
2021 Proxy Contest Results Further Detail on Following Pages H1 2021 saw the conclusion of several pending proxy fights, with notable activist Board seats won at ExxonMobil, Lagardère and Kohl’s
Timing of Board Seat Wins Notable H1 2020 Contested Votes
Company Glass Lewis Activist ISS Rec. 44% of Board seats were won / Activist Rec. Successful? after proxy process initiated, compared with 53% in 2020 0 / 3 0 / 3 Dissident Nominees Dissident Nominees 7 0 / 4 2 / 4 3 Ongoing Dissident Nominees Dissident Nominees
✓ 3 / 4 2 / 4 21 Dissident Nominees Dissident Nominees (3 / 4 Dissident Nominees Elected) ✓ -- -- (3 / 5 Appointed via 71 Settlement) ✓ -- -- (4 / 4 Appointed via Settlement)
40 -- -- Ongoing
1 / 4 0 / 4 Dissident Nominees Dissident Nominees
✓ Outside Proxy Proxy Process After Proxy Through Final Vote Total Seats -- -- (1 / 4 Appointed via Process Initiated Filing Won Settlement)
Source: ISS Governance, public filings and press reports as of 6/30/2021. 12 2 Board Seats Won & Proxy Contests H1 2021 REVIEW OF SHAREHOLDER ACTIVISM Engine No. 1 and Its Campaign at ExxonMobil With two industry veterans at the helm, the newly launched Engine No. 1 has made an immediate impact with its high-profile campaign at ExxonMobil that tied together traditional criticisms of underperformance and capital allocation decisions with an intense public scrutiny of ESG issues Overview of Engine No. 1 Key Vectors of Engine No. 1’s Attack on ExxonMobil
Key Personnel
Chris James, Founder Long-Term, Sustained Share Price Underperformance • James co-founded one of the largest tech hedge funds, Andor Capital Management, before leaving in 2004 to start another fund called “ExxonMobil has dramatically underperformed for shareholders over any relevant time Partners Fund Management where he managed over $5bn in total period” assets at its peak • Engine No.1’s AUM is largely sourced from James’ personal wealth
Charlie Penner, Head of Engagement • Penner is a former partner and Chief Legal Officer at prolific activist firm JANA Partners, for which he led the joint effort with CalSTRS to push Apple to add child safety features to its products Poor Capital Allocation Discipline • Penner headed JANA’s impact investing effort while at the firm “A focus on chasing production growth over value has resulted in an undisciplined capital allocation strategy and has destroyed value even during periods of higher oil and gas prices” Mission / Purpose
• Engine No. 1, which launched on 12/1/20, believes “a company’s performance is greatly enhanced by the investments it makes in workers, communities and the environment” and seeks to engage as active owners on these topics Board Lacks Industry Experience and Climate Competency Far too many companies fail to incorporate externalities into their business strategies. Having built companies from the ground up across multiple industries in transition, we “A lack of successful and transformative energy experience on the Board has left have a first-hand understanding of how a company’s performance and its ExxonMobil unprepared and threatens continued long-term value destruction” broader impact are intrinsically linked.
Framing the debate as ‘shareholder capitalism versus stakeholder capitalism’ does both parties a disservice. Over the long-term, shareholder and stakeholder interests align, and companies that invest in their stakeholders are better, Failure to Address Energy Transition Strategy stronger companies as a result. Through active ownership, we will seek to leverage our long duration capital and operational expertise to build long-term value by focusing “A refusal to accept that fossil fuel demand may decline in decades to come has led to a on where we can have positive impact. failure to take even initial steps towards evolution, and to obfuscating rather than addressing long-term business risk” CHRIS JAMES, ENGINE NO. 1 PRESS RELEASE, 1 DECEMBER 2020
Source: Engine No. 1 website, BoardEx, FactSet and press reports. 13 2 Board Seats Won & Proxy Contests H1 2021 REVIEW OF SHAREHOLDER ACTIVISM Significant Impact on ExxonMobil’s Boardroom In spite of its de minimis ownership (<0.1%), Engine No. 1’s campaign directly or indirectly resulted in 5 of 12 Board seats turning over
Added by XOM After Campaign ExxonMobil Directors as of December 2020 Engine No. 1 Nominees Launch / Before Vote
Darren Woods (1/16) Kenneth Frazier* Gregory Goff Jeff Ubben (3/21) (5/09) Founder & Managing Chairman and CEO, Former CEO, Partner, Inclusive ExxonMobil Chairman and CEO, Andeavor Capital Partners; Merck1 Founder & Chairman, ValueAct
Joseph Hooley III Dr. Susan Avery Kaisa Hietala Mike Angelakis (3/21) (1/20) (2/17) President Emerita, Former EVP of Former CFO, Comcast Former Chairman and Woods Hole Renewable Products, CEO, State Street Oceanographic Neste Institution
Angela Braly (5/16) Douglas Oberhelman Alexander Karsner Wan Zulkiflee (1/21) (5/15) Former Chairwoman, Former U.S. Assistant Former President and President and CEO, Former Chairman and Energy Secretary for CEO, Petronas WellPoint (now CEO, Caterpillar Energy Efficiency and Anthem) Renewable Energy
Ursula Burns (11/12) Samuel Palmisano Anders Runevad (1/06) Former Chairwoman Former CEO, Vestas and CEO, Xerox Former Chairman, Wind Systems President and CEO, IBM
2 Steven Kandarian William Weldon Elected to Board at 2021 AGM (2/18) (5/13) Not elected to Board at 2021 Former Chairman, Former Chairman and AGM President and CEO, CEO, Johnson & MetLife Johnson * Lead Independent Director
Source: BoardEx, Company filings. Note: Dates (m/yy) in parentheses represent dates in which incumbents / Directors added prior to the 2021 AGM were appointed. 14 1 Merck announced that Frazier is retiring from his position as CEO effective 6/30/2021, though he will continue to serve on the Company’s Board as Executive Chairman for a “transition period to be determined by the Board”. 2 Did not stand for re-election at the 2021 AGM after reaching the Company’s mandatory retirement age. 2 Board Seats Won & Proxy Contests H1 2021 REVIEW OF SHAREHOLDER ACTIVISM Wide-Ranging Support for Change at ExxonMobil Engine No. 1’s multi-faceted critique of ExxonMobil garnered wide support across the shareholder base and other major third parties
Engine No. 1 Institution % O/S XOM1 Support Rationale Nominees Supported
• “We have further observed that an increasingly pressing need exists for Exxon to 8.3% Goff and Hietala better align its climate strategy with (1) target setting in line with global peers and (2) its public policy efforts related to climate risks.”
• “Exxon has historically recruited directors, who, while highly accomplished in their own right, lacked specific energy industry experience. We feel that having a broad 6.7% Goff, Hietala and Karsner range of energy experience on Exxon’s Board could assist in further guiding the strategic direction of the company”
• “[Hietala and Karsner would help Exxon’s Board] oversee an energy transition 6.0% Hietala and Karsner
strategy, underpinned by an appropriate capital allocation approach” Shareholders
0.5% Goff, Hietala and Karsner • Not publicly stated
• “It’s time for change at ExxonMobil, and change is coming… the recommendations Goff, Hietala, Karsner and by Glass Lewis and ISS reaffirm our belief that ExxonMobil’s board must be 0.2% Runevad strengthened to drive systemic change and help ensure a long-term energy transition strategy.” • “Adding dissident nominees Goff and Hietala will address the need for independent industry expertise, which would assist in rectifying operational concerns; Hietala’s N/A Goff, Hietala and Karsner experience, along with the addition of dissident nominee Karsner, would also elevate the Board’s ability to assess the energy transition” • “We believe more proactively addressing the environmental, social and governance risks that are currently impacting the Company will ultimately translate into improved N/A Goff and Karsner operational and financial performance as well as greater total returns and shareholder value” • “The Church Commissioners for England are pleased to lend their support to Engine Goff, Hietala, Karsner and No. 1’s proposals to re-energise ExxonMobil. Calls for the company to address Proxy Advisors Advisors Proxy Other / --2 Runevad shareholders’ concerns about strategy, governance and climate mitigation… have gone unheeded”
Source: FactSet as per latest filings; ISS, Glass Lewis, Firm websites and public filings. 15 1 Ownership data reflects 3/31/2021 13F and mutual fund monthly filings. 2 The Church of England divested its position in Exxon in October 2020 following failed engagements, but vocally supported Engine No. 1’s campaign at the Company and all the activist’s Board nominees. 3 M&A Remains Primary Objective H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Sustained Prominence of M&A-Related Campaigns Globally ($ in billions) While the prevalence of M&A as an overall campaign objective in H1 2021 was consistent with prior-year levels, the mix of M&A-related activism continued to shift towards challenging existing transactions, with fewer occasions of activists pushing for a sale M&A Campaigns M&A Campaign Objectives by Type M&A Campaigns (% of All Campaigns) M&A as a percentage of all campaigns was Scuttle or Sweeten Exisiting Deal Break-Up / Divestiture Sell the Company consistent with historical averages at ~40%
Number of M&A 76 84 99 76 41 Campaigns 12% 47% 18% 44% Mean: 40% 41% 35% 39% 42% 36% 34% 32%
42%
2017 2018 2019 2020 H1 2021
H1 2021 Capital Deployed in M&A Campaigns by Sector 23% 33% 29% Capital Deployed in M&A Campaigns Capital Deployed in Non-M&A Campaigns
$3.7 $3.6 $2.9 $2.2 56% $2.6 $2.0 $1.9 $2.1 $1.5 $1.5 38% 40% $0.3 $0.4 $0.5 $0.3 $0.3 $0.2 29% 32% $0.5 $0.7
$0.0
Retail
Media
Telecom
Financial
Industrials
Consumer
Institutions
Healthcare
Power,
Technology Real Estate
2017 2018 2019 2020 H1 2021 Energy Infra. &
Source: FactSet, press reports and public filings as of 6/30/2021. 16 Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. 3 M&A Remains Primary Objective H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Europe: Increased Focus on M&A Thesis Related to Existing Deals While M&A remained a prevalent campaign objective in Europe in H1 2021, the mix of M&A-related activism significantly shifted towards agitation around announced transactions H1 2021 European Campaign Objectives European M&A Campaign Objectives by Type
M&A remained the most common Scuttle or Sweeten Exisiting Deal Break-Up / Divestiture Sell the Company objective for activists in H1 2021
8% 7% 16% 33% 18%
24% 24%
19% 24% 42% 48% 14% 14%
50%
100%
M&A Governance Strategy / Board Change Capital Return Management Operations Change
H1 2021 60% • H1 2021 saw a downtick in the proportion of M&A-related activist 50% campaigns—however, it remained the most common campaign 45% objective in Europe 32% • 100% of H1 2021 M&A campaigns were related to opposing deals and / or deals’ conditions or price
• While the pandemic may have put a break on attacks against management teams and Boards, activists have intensified their criticism around governance issues as the market recovers 2017 2018 2019 2020 H1 2021
Source: FactSet, press reports and public filings as of 6/30/2021. 17 Note: All data is for campaigns conducted globally by activists at companies with market capitalizations greater than $500 million at time of campaign announcement; select campaigns with market capitalizations less than $500 million at time of announcement included during the COVID-19 pandemic-induced market downturn. Campaigns may feature multiple objectives; as such, percentages will not equal 100% if added up. 3 M&A Remains Primary Objective H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
The Activist Role in M&A in H1 2021 Scuttle or Sweeten Sell the Company Break-Up / Divestiture Existing Deals Agitate for sale of target or encourage Agitate for a divestiture of a non-core Entry into a live M&A situation to improve deal terms industry consolidation business line or company breakup or block an ill-perceived deal from proceeding 12% 32% 56%
Target / Activist M&A Thesis Target / Activist M&A Thesis Target / Activist M&A Thesis
Legion Partners nominated a TCI claimed Canadian Eystra Capital published a seven-person slate for National’s merger with Kansas presentation that election; the slate was City Southern (“KCS”) is “ill- recommended Yelp sell itself reduced to four with Legion advised and unnecessary” to Square, claiming that Yelp claiming its nominees were and criticized plans to create a 4/21 has underperformed with 4/21 5/21 prepared to start discussion voting trust to buy and own current management and the about “eliminating Genesco’s KCS while regulatory approval acquisition would help rebuild inefficient conglomerate is pending, given the C$2bn Yelp’s business model and structure [and] monetizing investment necessary and strategy non-core assets” regulatory risk
After nominating six Directors JANA disclosed a stake and HBK, the largest holder of to the Board, the activist group the media suggested that William Hill, opposed the advanced a takeover offer JANA was pushing for the Company’s merger with to buy out Columbia for spin-off of the Covance clinical Caesars Entertainment, 3/21 $19.50 per share; the group 2/21 research business; after 3/21 stating that shareholders were later withdrew all their reportedly nominating deprived of “information which candidates following Columbia Directors, the Company would have allowed them to announcing a planned launched a review and JANA weigh up its true merits”; the strategic review withdrew its nominations merger was completed in April
Pentwater nominated its CEO JANA reported that it had Ancora nominated four to the Board, a move that the engaged in discussions with Directors to the Board and media reported was tied to the Board regarding capital argued that the Company disappointment in the allocation, operations, should rethink its strategy and Company’s sale process; the 2/21 2/21 2/21 governance and a potential sell its TaxAct tax business; all Company shortly thereafter sale; a settlement was later of Ancora’s nominees failed to agreed to sell itself to private reached and the activist was be elected at the April 2021 equity firms Stone Point granted two Board seats AGM Capital and Insight Partners; the acquisition closed in June
Source: FactSet, press reports and public filings as of 6/30/2021. Note: All data is for campaigns conducted globally at companies with market capitalizations greater than $500 million at time of campaign announcement. 18 4 ESG in the Spotlight H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Updates to the ESG Landscape: Environmental Issues in Focus
Climate change-related regulatory developments—especially those related to mandatory disclosures and net-zero goals—represented a major focus of regulators and stakeholders in H1 2021
• As the SEC looks to propose rules on mandatory climate-related disclosures as soon as October, the debate around the extent of disclosures is becoming more fraught as issuers worry about potential legal liabilities stemming from reporting − Reports that the SEC is looking to have climate disclosures furnished in standard corporate reports (e.g., 10-Ks) have led companies including Bank of America, Alphabet and Amazon to suggest that appropriate safe harbor provisions be introduced, or Climate Reporting companies be allowed to disclose climate-related information outside of standard reports Dominates U.S. − Overall, there is broad agreement across issuers, investors and other stakeholders that any disclosures align with existing Regulatory Agenda frameworks such as SASB and TCFD • In May 2021, the Biden administration signed an executive order for the government to further investigate climate-related financial risk − The order dovetails with the G7’s decision to back mandatory climate reporting in line with TCFD • Treasury Secretary Janet Yellen appointed John Morton, a former Obama White House official, as the Treasury’s “climate czar”
• The Biden administration has announced that the U.S. will cut its greenhouse gas emissions 50% by 2030 from 2005 levels, an acceleration of previous Obama-era goals • The same week, a coalition of ~160 financial firms representing assets of ~$70tn, announced the launch of the Glasgow Financial Alliance for Net Zero (GFANZ) − All members of GFANZ have committed to a net zero by 2050 target, using their investing and financing capabilities to achieve that Focus on Climate and target “Net Zero” Efforts − GFANZ includes the Net Zero Asset Managers Initiative, which includes investors such as BlackRock, State Street, Vanguard and Wellington, representing ~$37tn in AUM overall • In June, the European Council set into legislation its objective for the EU to become climate neutral by 2050 − The law includes a binding net greenhouse gas emissions reduction target of 55% (vs. 1990 levels) by 2030 • These efforts come as corporate net zero pledges are receiving greater scrutiny as stakeholders assess the credibility of corporate roadmaps to achieving these goals
Further Steps to • In June, the Sustainability Accounting Standards Board (SASB) and International Integrated Reporting Council (IIRC) announced the Disclosure Framework completion of their merger to form the Value Reporting Foundation Consolidation − The new organization will continue work with the IFRS Foundation as it formulates its Sustainability Standards Board
Source: FactSet, press reports and public filings. 19 4 ESG in the Spotlight H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
U.S. ESG Equity Inflows Remain on Pace for a Record Year ($ in billions) Though the pace of inflows into ESG-related funds moderated slightly in April and May, 2021 inflows remain on pace to exceed 2020’s record total
U.S. ESG Mandate Net Equity Fund Flows ($bn), 2018 – May 2021 U.S. ESG Mandate Equity Fund AUM ($bn), 2016 – May 2021
Cumulative U.S. ESG Mandate $377 Net Equity Fund Flows Style Since 2018 2021 YTD2 Passive1 +$69.5 +$19.0 $325 Active +$58.2 +$12.3 Total +$127.7 +$31.4
Total Inflows, 2020 – Current: $93.3bn 263
$200 235
$138 $139
$110 164
121 119 99 114 90
37 11 17 20 2016 2017 2018 2019 2020 May-21
Passive1 Active
Source: SimFund, press reports and public filings. Note: U.S. “ESG Mandate” funds comprise those with explicit ESG investment criteria. 20 1 Includes both ETFs and index mutual funds. 2 Reflects inflows through May 2021. 4 ESG in the Spotlight H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
2021 Proxy Season: Investors Pressure U.S. Companies 2021 has seen the continuation of long-term trends around investor support for ESG issues, including a record number of E&S-related shareholder proposals receiving majority support S&P 500 “Say-on-Pay” Support Russell 3000 Directors Failing to Receive Majority Support S&P 500 E&S Proposal Support
Failed Successful Proposals Proposals 6 2018 33 2018 91.2% 2018 23.2% 3
8 2019 49 2019 90.3% 2019 24.8% 6
12 2020 50 2020 89.5% 2020 25.6% 19
H1 H1 H1 88.1% 16 60 28.5% 2021 2021 2021 23
Notable “Say-on-Pay” Votes Notable Director Votes Notable Support for E&S Proposals
• ~61% of Chevron shareholders voted • ~48% of shareholders voted in favor of for a proposal requesting that Chevron Starbucks’ compensation package • Paycom’s two Directors up for election “substantially” reduce its Scope 3 received support of ~35% and ~51% − Proxy advisors recommended emissions in the medium and long term against the proposal, criticizing the − ISS recommended against the − BlackRock voted in support of the rationale for a special performance Directors, citing supermajority vote proposal, noting that the proposal award given the size of the award requirements and a classified was not overly prescriptive and its and that it had been the second Board, as well as ongoing desire to see companies take consecutive year with such an compensation concerns further action to reduce Scope 3 award given emissions
• Only ~17% of shareholders voted in • Stamps.com’s two Directors up for favor of Norwegian’s compensation election each failed to receive majority package support • ~81% of DuPont shareholders voted − Proxy advisors and investors noted − ISS recommended against the for a proposal to have the Company that the Company had made Directors, citing a lack of issue an annual report on plastic changes to its annual and long-term independence on the Board and pollution and an assessment of plastic incentive bonuses that increased failure to respond to a lack of contamination reduction efforts total compensation for the CEO majority support for Directors up for despite the effect of the pandemic election in 2020 on its operations
Source: ISS Governance, public filings and press reports as of 6/30/2021. 21 4 ESG in the Spotlight H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Notable H1 2021 Say on Climate Proposals Several prominent issuers, in particular across Europe, included “Say on Climate” advisory resolutions on their 2021 ballots; while the majority have come at the behest of shareholders, such as TCI, companies are also voluntarily adopting such proposals
Company Voting Date Frequency % for Votes Observations
• Transition plan to reduce direct greenhouse gas emissions by 40% by 2030, to take action to reduce April 2021 n.a. 98% emissions across the value chain and to improve company climate change resilience
April 2021 n.a. 94% • Transition to zero emissions by 2050 with reduction of 40% emissions by 2035
• Transition to zero emissions by 2050 including 50% reduction by 2030 April 2021 n.a. 95% • Combined with ESG tie to executive compensation reinforcement
• First S&P 500 company to join Say on Climate initiative * April 2021 Annual 99% • Transition plan to carbon neutrality by 2050 • Combined with further incorporation of ESG in credit ratings
* April 2021 Annual 92% • Transition to zero emissions by 2050
April 2021 Annual 97% • Transition to gas emission reduction plan as per the company’s climate strategy report
• Transition to zero emissions from its own operations and 50% reduction of average product footprint by May 2021 Triennial 99% 2030, as well as zero emission from sourcing to point of sale by 2039
May 2021 Triennial 89% • Transition plan to zero emissions by 2050 including 20% by 2030 and 45% by 2035
• Transition plan to carbon neutrality and 2030 objectives May 2021 n.a. 92% • Combined with ESG tie to executive compensation reinforcement
• Transition to net-zero by 2040 May 2021 n.a. 100% • 25% reduction in scope 1 and 2 GHG emissions from operations by 2025, 25% reduction in scope 3 GHG emissions from business travel by 2025
• Put to vote the TCFD-aligned reporting in order to disclose consistently with the evolving Climate Action AGM 2022 n.a. -- 100+ group
Source: Company publications. 22 * Resolution filed by TCI 5 Dry Powder for Continued SPAC M&A H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
H1 2021 SPAC Business Combinations and Outstanding Volume ($ in billions) The SPAC M&A market remains robust with 163 deals completed in H1 and 424 SPACs ($129bn of dry powder) still searching for targets; while activism has not yet surfaced at a de-SPACed company, several high-profile short campaigns have occurred since the start of the year
Monthly Announced SPAC Business Combination Volume Selected Recent Short Campaigns Against “De-SPACed” Companies1
Transaction Volume Number of Stock ($bn) Transactions Campaign Performance Date Campaign Details (Short Seller) Since $140 $116.7 50 1 Day2 Report3 120 44 $79.8 40 100 • Accused the Company of operating in 33 $60.7 $81.6 illegal markets, including with organized 80 $36.5 30 26 6/2021 (4.2%) +3.1% criminal syndicates, and questioned the $40.0 $58.3 24 60 (Hindenburg viability of the Company’s large promotion $39.4 19 19 20 $21.4 17 $21.2 17 Research) 40 $12.1 and marketing budget $5.3 13 13 11 9 $20.0 10 20 7 • Claimed management was engaged in 0 0 unscrupulous behavior at previous Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 companies, has a financial relationship 4/2021 (8.0%) +0.2% Announced M&A Volume Number of Transactions with a lab the Company uses to support its (Spruce Point) efficacy and has provided inconsistent Searching SPAC Dry Powder Outstanding timelines and financial goals
Volume Outstanding Number of SPACs • Accused the Company of misleading ($bn) Outstanding investors about the capabilities of its $139.9 electric pickup truck and making false $138.3 $134.5 $129.2 $180 450 statements regarding the number of pre- $111.6 433 427 422 424 3/2021 (16.5%) (37.5%) 160 400 orders for the truck (Hindenburg 357 • In June, Lordstown’s CEO and CFO 140 $86.5 350 Research) resigned following announced 120 $68.9 294 300 100 $64.2 250 inaccuracies around truck pre-orders $59.6 222 80 $45.1 198 200 • Criticized the Company for allegedly not $40.1 172 60 150 disclosing to investors that it was under $18.6 $19.4 $24.3 133 40 111 100 investigation by the DOJ into the business 74 20 54 63 50 2/2021 (12.3%) (4.5%) model and software offering 0 0 • In June, Clover became the focus of retail (Hindenburg Research) traders on Reddit seeking to initiate a short squeeze Searching SPAC Volume Number of SPACs Source: SPACInsider as of 6/30/2021. 23 Note: Short campaigns not included in long-only activism figures. 1 Represents publication of short report. 2 Representes days since publication of short report. 3 As of 6/30/2021. H1 2021 REVIEW OF SHAREHOLDER ACTIVISM
Lazard’s Capital Markets Advisory Group—Key Contacts
Managing Director and Mary Ann Deignan (212) 632-6938 [email protected] Co-Head of Capital Markets Advisory
Managing Director and Jim Rossman (212) 632-6088 [email protected] Co-Head of Capital Markets Advisory
Managing Director and Rich Thomas +33 1 44 13 03 83 [email protected] Head of European Shareholder Advisory
Christopher Couvelier Managing Director (212) 632-6177 [email protected]
Kathryn Night Director (212) 632-1385 [email protected]
Antonin Deslandes Vice President +33 1 44 13 06 77 [email protected]
Craig Durrant Vice President (212) 632-6567 [email protected]
Emel Kayihan Vice President +33 1 44 13 01 47 [email protected]
Lauren Ortner Vice President (212) 632-6265 [email protected]
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